Financial Data and Key Metrics Changes - At the end of Q1 2023, the company had approximately $12.9 million in cash and marketable securities, an increase from $8.4 million at the end of the previous quarter [12] - The company experienced a one-time loss recognition of $19.9 million due to the settlement of the 2026 notes and the creation of the 2028 notes, primarily driven by the fair valuation method used [15] Business Line Data and Key Metrics Changes - The company closed a convertible debt offering generating proceeds of $14 million, which was used to retire old debt and fund ongoing projects [8] - The black mass scoping study indicated potential EBITDA of approximately $12.6 million in year one and $9.9 million in year two from processing 2,500 tonnes of recycled material per year [23] Market Data and Key Metrics Changes - The outlook for the EV battery market remains extremely bullish, bolstered by the US Inflation Reduction Act and other incentives across North America [28] - The company noted that access to capital has become considerably more challenging due to tougher equity markets for small caps and higher interest rates [27] Company Strategy and Development Direction - The company is committed to completing the refinery project and capitalizing on its first-mover advantage in the black mass recycling market [28] - A strategic review has been launched to evaluate potential alternatives to address the funding shortfall for the refinery project [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the construction of the refinery is currently stalled due to cash issues, but once funding is secured, completion could take approximately 14 months [55] - The company is focused on managing capital and expenditures while preparing to resume construction once the remaining capital is lined up [45] Other Important Information - The company has developed a sustainability framework in partnership with stakeholders, focusing on climate change, human rights, and health and safety [10] - The black mass trial project has generated considerable interest, and the company is looking to build a black mass operation using existing refinery infrastructure at an estimated cost of approximately $6 million [48] Q&A Session Summary Question: What is the timeline for completing the refinery once funding is secured? - Management indicated that a conservative estimate for completion might be around 14 months, depending on funding alignment and crew availability [55] Question: What are the potential funding sources being considered? - Management mentioned discussions with various partners, including traditional lenders and automakers, to secure funding for the refinery project [56] Question: How does the $6 million CapEx for the black mass operation translate into EBITDA? - Management explained that the $6 million investment is expected to generate significant cash flow quickly due to leveraging existing infrastructure, which minimizes capital expenditure [57][59] Question: Will the completion of the refinery be necessary for engaging in black mass processes? - Management clarified that the refinery is operational and can process material concurrently with the black mass project, allowing for quicker cash flow generation [61] Question: What is the company's approach to the Three Fires agreement? - The company is collaborating with Three Fires to build shredding capabilities and secure a captive feed source, which aligns with their strategic goals [97]
Electra Battery Materials (ELBM) - 2023 Q1 - Earnings Call Transcript